Welcome to the July Agribusiness issue of NorthBay biz. As chronicled through the years on the pages of this magazine, California has alternately thrived and suffered through the boom and bust cycles that are endemic to its overall economy. The excesses of these swings are at the root of the state’s bipolar nature. It’s more than a little disappointing, then, that the steady growth and stability exhibited by our $50-billion-plus agricultural heritage hasn’t been able to cross over to the rest of the state’s economy.
Here in the North Bay, the ag community not only contributes significantly to the local economy, but also to the pleasing rhythm of local life. So sit back and enjoy the stories in this issue as we attempt to capture that ineffable spirit that personifies the bucolic lifestyle that is the North Bay.
“If you’re not a liberal at 20, you have no heart; if you’re not a conservative at 40, you have no brain.” —Winston Churchill
In what has sadly become an annual rite, the California Chamber of Commerce has released its 2011 list of “Job Killer” legislation pending in the Sacramento Assembly. Across the country, dozens of states have taken strong steps toward fiscal sanity by proposing and then enacting policy to eliminate deficits and provide a stable economic environment conducive to job creation. Even in formerly long-time liberal states like Michigan, Wisconsin, Ohio, Pennsylvania and New Jersey, the path of irresponsible spending is being abandoned.
This isn’t exactly the template being followed by our legislators here in California. They know better. What’s needed is just a lot more of the same.
According to Allan Zaremberg, president of the CalChamber, “This year’s list of 28 Job Killing bills, if signed into law, would increase costs for employers, lead to more regulations and litigation, and create further barriers to investment for companies hoping to do business here and to hire California workers.” He goes on to say, “It’s important to note that the first step in an economic recovery program is to do no more harm. Yet, proponents of anti-business legislation are ignoring California’s obvious and painful economic situation. Apparently, they think California’s economy can withstand additional pressure from new regulatory and legislative burdens. They are simply unwilling to accept the unfortunate reality that California has the second highest unemployment rate in the country (even higher than Detroit’s!) and is currently ranked at the bottom when it comes to business climate.”
So what’s really going on here and across America that’s causing a “hiring strike” by private business? To sum it up in one word: uncertainty! The threat of increased taxes and the massive pending regulatory burdens that’s poised over the heads of business is just waiting to be enacted. Uncertainty—Obamacare and the Dodd-Frank financial regulation bills are rife with thousands of to-be-determined regulations that will impose impossible-to-estimate (though certainly in the billions) costs on business and the economy. Who’s going to hire in an environment where costs can’t be planned?
But we continually hear from our elected officials both here in California and nationally that everything is fine. We just need a little time and more “shared sacrifice.” You know how that works: All we have to do is punish success and, magically, that will result in job creation. No need to cut spending or balance budgets, just confiscate a little more of the wealth created by the private sector.
According to the Tax Foundation, California has the third highest income tax rate among the states. The top 1 percent, those earning $500k or more annually, already pay 50 percent of the taxes collected in California. I have a great idea: Let’s make them pay more. That’s only fair. But according to CalTax, the number of Californians reporting million-dollar-plus incomes fell by more than 20 percent in 2009. Reported income fell by almost 28 percent and the extra 1 percent tax on millionaires fell by more than 31 percent. How much of this loss of tax revenue was due to wealthy earners moving to a more tax-friendly state and how much was because of the recession? Think about it. If you live in Sacramento and make $5 million, you can move a few hours away to Nevada and keep $500,000 annually in your own pocket. What would you do?
Nationally, the call for higher taxes on the rich is becoming deafening. No matter that you could confiscate every dollar the rich earn and not satisfy the budget deficit. Factoring for inflation, federal taxes are 23 times what they were in 1960. Unfortunately, federal spending is 42 times higher!
Today’s politicians’ insatiable lust for control over our lives necessitates their need for ever vaster sums of taxpayer dollars. Pitting group against group, class warfare, casting entitlements as rights and creating victims are just tools employed to this end. It’s about the accumulation of power. Redistributing wealth is spun as a noble cause while success has become evil. The productive are vilified and the unproductive are held up as role models.
In a former reality, businesses were hailed as wealth generators, creating jobs and the driving force in a thriving economy where anyone with a work ethic could better themselves. In today’s reality, politicians cast millions as victims knowingly exploited by a corrupt capitalistic system and rationalize that the greedy must subsidize the needy. The “it’s only fair” crowd wants the government to be the arbiter of personal outcomes. Only through their wisdom and beneficence can fairness be enforced. The battle rages on at the state and federal levels whether the government should continue to grow or be reduced. Do we want a central command and control system staffed by faceless bureaucrats or do we want to reclaim control over our own lives at the local level? November 2012 should answer many questions.
That’s it for now. Enjoy this month’s magazine.
